The present invention relates to search engine marketing and, in particular to techniques for optimizing bids for a set of keywords associated with an online marketing campaign.
Search Engine Marketing (SEM) constitutes a significant portion of the online advertising market. Among other things, SEM involves selecting relevant keywords and initiating and maintaining advertising campaigns targeting search engine users entering the keywords in their search queries. The search engine selects appropriate links to relevant content, and also places sponsored links on the search results page. In order to be included among the sponsored links, an advertiser pays an amount of money to the search engine operator for every user click, i.e., the so called keyword bid.
Unfortunately, there currently are no systematic techniques for efficiently allocating an advertising budget over a suitably constrained set of keywords. Typically, such allocations are done without any real empirical basis. Instead, advertisers use a variety of approaches from exercising a “gut feeling,” to simply bidding equally on every keyword. The shortcomings of such approaches are manifest.
More effective techniques for allocating an advertising budget over a set of keywords are therefore desirable.